Gazprom Neft Orenburg: Introduces Innovative Model of Cooperation with Oilfield Service Companies

Gazprom Neft Orenburg has achieved a significant decline in well servicing and workover costs through implementing the Split Services project.

The Company’s objective is to boost production and developed reserves while reducing both capital and operational expenditures. This can only be obtained through introduction of groundbreaking technologies and tools, that is why Gazprom Neft Orenburg performs a continuous search of new solutions. A new approach to managing well servicing and workover operations made it possible to enhance efficiency and meanwhile focus on the feasibility, security and quality of services provided by the service companies.

Oilwell servicing and workover is a comprehensive process, which requires the participation of service companies to perform different types of activities at every stage of the production scheme. Formerly, Gazprom Neft Orenburg pursued a single-contractor approach, that is, all well servicing and workover operations were carried out by a single contractor. Thus, all the associated risks connected with the work performance and logistics were borne by a well servicing contractor. Upon entering new areas of activity, the contractors hedged these risks and had to focus their attention on finding sub-partners in the respective area. At the same time, the contractors could not fully concentrate on HSE issues, well servicing and workover quality and personnel development. The aspiration to boost the performance efficiency, minimize risks and enhance the reliability encouraged the introduction of the split service approach at Gazprom Neft Orenburg’s fields. The top managers of Gazprom Neft Orenburg have gone to considerable lengths to change the approach to well servicing and workover and make it completely different, at the same time assessing all the risks – both financial and technological – of switching to this new model. Several meetings were held between the Company’s management and representatives of service organizations and a cross-functional team was set up. Together they worked out a strategy and developed an optimum model based on the principles of the win-win approach in close cooperation with the counterparties.

In 2020, the Company launched an introduction of the split services system, envisaging the involvement of well servicing and workover companies to perform only field-specific types of work and transfer the related services to specialist service partners under direct contracts managed by the customer company:

1) transportation supply and logistics;

2) tubing, and drill pipes for well servicing and workover operations;

3) special tools for process operations and elimination of emergencies and incidents.

All the services mentioned above became the area of responsibility of Gazprom Neft Orenburg; the Company assumed full risks related to such activities. The following basic areas for improvement were selected for the Split Services project:

1) increasing the productive time ratio through efficient relations management and creating conditions for quality improvement of well servicing and workover activities;

2) raising the HSE culture;

3) improving the quality of repairs;

4) reducing the repair time;

5) minimizing accidents during servicing operations and transportation;

6) reducing turnover among well servicing and workover contractors’ employees;

7) gaining a beneficial economic effect;

8) expanding the contractors’ market in the region.

Transition from the key-turn model to the innovative model of downhole operations management is a breakthrough approach not only for the Company, but for the whole Russian oil industry as well. The whole process is consolidated on the asset level, which allows for reaching synergies, managing well servicing and workover in an agile way, quickly responding to changes and swiftly making adjustments. This way, a partner may focus solely on the quality of well servicing and workover, as well as the HSE issues.

Project implementation started in April 2019 with the assessment of feasibility and existing potential for alternative concepts, and as soon as September 2020, the well servicing and workover teams commenced field operations. A record-breaking period between the project development and its implementation is the result of the team’s efficient cross-functional work. 

The new operation procedure boosted the productive time ratio for well servicing and workover by 23 per cent (from 74 per cent in 2018 to 97 per cent in 2021). The LTIF equals zero; far fewer technical irregularities have been registered. The effect of introducing this new approach to cooperation with oilfield servicing companies amounted to about USD 1.5 million as of the end of 2021. 

In the long run, this project will be passed on for implementation among Gazprom Neft’s subsidiaries in other regions of Russia. 

Project Team 

Gazprom Neft Orenburg, LLC:

Evgeny Kapusta, Chief Technical Officer, 

Damir Kashapov, Head of Drilling and Downhole Operations Directorate 

Gazprom Neft, PJSC

Alexei Ogorodov, Director General of a subsidiary company

Sergei Tishkevich, Director for Downhole Operations Programs

Alena Bondarenko, Head of Directorate for Purchasing Efficiency 

Konstantin Stepin, Head of Directorate for Production Services Purchasing 

Roman Suchkov, Head of Expert Review Panel, Internal Audit Department